In the News

May 23, 2011 — The Obama administration has indicated it will not approve changes to Indiana's state Medicaid program that are needed to comply with a recently enacted state law that cuts off Medicaid reimbursements to clinics affiliated with Planned Parenthood of Indiana, the New York Timesreports. Although federal officials have 90 days to review the changes before acting, they might act sooner because the state already is enforcing the measure, which took effect on May 10, and other states are considering similar legislation. The administration said the Indiana law imposes impermissible restrictions on the freedom of Medicaid beneficiaries to choose health care providers (Pear, New York Times, 5/22).

The law, recently signed by Gov. Mitch Daniels (R), prohibits state contracts or grants to entities that provide abortion services. PPIN and the American Civil Liberties Union of Indiana have filed suit against the law, but U.S. District Judge Tanya Walton Pratt rejected the organizations' request to issue an immediate injunction to block enforcement of the measure, and the funding ban went into effect immediately. The judge will hold a hearing on PPIN's request for a permanent injunction on June 6 and is expected to decide by July 1 whether to continue allowing enforcement while she considers the case.

The measure exempts hospitals and other surgical centers, effectively singling out Planned Parenthood clinics in Indiana for the funding restrictions. The law prohibits state funds and federal money that flows through the state from going to Planned Parenthood clinics; in effect, the bill would bar Medicaid beneficiaries from obtaining care at Planned Parenthood clinics in Indiana because PPIN would no longer be reimbursed through Medicaid for the health care services it provides to Medicaid beneficiaries. Although federal law prohibits the use of federal Medicaid funds to pay for abortion care, Planned Parenthood clinics can receive reimbursement from Medicaid for non-abortion health care services the clinics provide. Patient fees and private funds pay for abortion care provided at Planned Parenthood clinics.

Another provision in the law bans abortion after 20 weeks of pregnancy unless a woman's life or health is substantially threatened. Current state law permits abortion before viability, which is generally determined by doctors to be several weeks beyond the 20-week threshold in the law. The legislation would require abortion providers to inform women in writing that human life begins when the egg is fertilized, that abortion can increase the chances of infertility and that a fetus might feel pain before 20 weeks. The abortion provision takes effect July 1 (Women's Health Policy Report, 5/20).

CMS released a statement on the law, saying, "Federal law prohibits federal Medicaid dollars from being spent on abortion services. Medicaid does not allow states to stop beneficiaries from getting care they need -- like cancer screenings and preventive care -- because their provider offers certain other services. We are reviewing this particular situation and situations in other states."

Medicaid is funded jointly by the federal government and states, and states must obtain federal permission for exemptions from certain federal Medicaid requirements. Federal regulations state that "no waiver" may restrict the freedom of Medicaid beneficiaries to receive family planning services from a provider of their choice. In Indiana, state Medicaid officials warned lawmakers that the legislation could violate federal regulations. While the federal government normally pays about 66% of Indiana's Medicaid costs, it pays for 90% of its family planning services. Federal officials can take corrective action, such as "the total or partial withholding" of the money if a state is not in compliance with Medicaid regulations (New York Times, 5/22).

Gov. Daniels Will Not Seek GOP Presidential Nomination

On Sunday, Daniels said he would not seek the Republican presidential nomination, citing family reasons as the deciding factor, the New York Times reports. "In the end, I was able to resolve every competing consideration but one," the Indiana governor said, adding, "The interests and wishes of my family is the most important consideration of all" (Zeleny/Rutenberg, New York Times, 5/22).